Hurdles for Alternative Health Affiliates

Administrator

Posted on 6.23.2011

Confronting Regulatory Challenges with Alternative Health Publishers

In April, the FTC filed suit against fake news sites promoting Acai berries as weight-loss products,
and attempted to freeze the assets of companies involved, pending trial. Beyond the sites
themselves, the network through which these publishers operated was also under review.

While this incident is not representative of the performance
marketing industry as a whole, cases like these teach us that
quality and integrity are vital publisher characteristics —
especially those that work in sectors facing strict regulation.
Publishers and advertisers in this sector have responsibilities
but both parties can take steps to minimize the risks and maximize
the benefits of their performance-based marketing.

What should publishers do?

Following a revision to FTC regulations in 2009, publishers
promoting alternative health products are required to add a
disclosure statement to their sites clarifying their commercial
relationship with advertisers. FTC regulations state that “when
there exists a connection between the endorser and the seller
of the advertised product that might materially affect the
weight or credibility of the endorsement... such connection
must be fully disclosed.” The first thing publishers must do
therefore is provide this disclosure onsite, regardless of
whether or not the advertiser requests this action. As
mentioned, those who fail to follow this
policy could face extremely steep fines.

To ensure compliance, publishers
can easily write the statement themselves
(or visit DisclosurePolicy.org).
Further, placing the disclaimer on a
separate page within their site can provide
blanket coverage to all links rather
than attaching the statement to each
individual link. The likely effect on
conversions is therefore minimal provided
the statement is clear and factual.

What should advertisers do?

While publishers are primarily responsible
for disclosing the commercial relationship,
advertisers are responsible
for advising the publisher to do so.
Further, advertisers should ensure that
all publishers on their program are
compliant with regulations. A crucial
element to enforcing compliance falls
within the program terms and conditions,
which should clearly state the
need for publishers to use this disclaimer.
This action is vital because entering
into a commercial relationship
with a publisher means “...the advertiser has assumed the
risk that an endorser may fail to disclose a material connection
or misrepresent a product, and the potential liability that
accompanies that risk.” However, the advice goes on to state
that “the advertiser’s efforts to advise these endorsers [publishers]
of their responsibilities and to monitor their online
behavior” will be taken into account should any issues arise.

Ultimately, it is the advertiser’s responsibility to ensure
that the correct product information is communicated to
their publishers. The FTC considers it “reasonable to hold
the advertiser responsible for communicating approved
claims.” Given that the advertiser established the relationship
with the publisher, they are “...responsible for taking
the appropriate measures to prevent those endorsements
from deceiving consumers.” Therefore, to help ensure publishers
are clear in how they use the promotional material,
advertisers may wish to provide a set of pre-approved copy
in different lengths that publishers can easily paste to their
sites to alleviate any compliance concerns.

In a case settled in March this year, the FTC also stated
that “whether they advertise directly or through publishers,
companies have an obligation to ensure that the advertising
for their products is not deceptive.” They go on to advise
a “reasonable monitoring program to verify that those
publishers follow the principles of truth in advertising.” Advertisers
therefore need to consider what this monitoring
process should look like. They may wish to undertake a regular
audit, conducted with the input of their network. An
added benefit to this action includes identifying re-engagement
opportunities with dormant publishers. More cautious
advertisers may wish to run an invite-only program that
remains publicly hidden on the network, making the task of
building relationships with publishers and monitoring their
activity more manageable.

Advertisers in fields such as health face a tough regulatory
environment. With proper attention to the points outlined
however, the alternative health sector can successfully
drive business through this channel. Ultimately, a higher
level of regulation is good news for the affiliate industry, as
it will sweep away malpractice and leave advertisers with
professional and capable publisher partners. The health market
could present a sizable opportunity for quality publishers,
as health advertisers will likely pay a premium for trusted
promotional partners.

Also Read: Sector Watch on Entertainment for AffiliatesIt’s not just the alternative health sector that is attractive for affiliate marketers. Learn effective affiliate promotional types, various means of engagement, and review misconceptions surrounding affiliate marketing within the entertainment sector.